Correlation Between AB SKF and Polygiene
Can any of the company-specific risk be diversified away by investing in both AB SKF and Polygiene at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining AB SKF and Polygiene into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AB SKF and Polygiene AB, you can compare the effects of market volatilities on AB SKF and Polygiene and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in AB SKF with a short position of Polygiene. Check out your portfolio center. Please also check ongoing floating volatility patterns of AB SKF and Polygiene.
Diversification Opportunities for AB SKF and Polygiene
Very weak diversification
The 3 months correlation between SKF-B and Polygiene is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding AB SKF and Polygiene AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Polygiene AB and AB SKF is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on AB SKF are associated (or correlated) with Polygiene. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Polygiene AB has no effect on the direction of AB SKF i.e., AB SKF and Polygiene go up and down completely randomly.
Pair Corralation between AB SKF and Polygiene
Assuming the 90 days trading horizon AB SKF is expected to generate 1.41 times less return on investment than Polygiene. But when comparing it to its historical volatility, AB SKF is 1.84 times less risky than Polygiene. It trades about 0.28 of its potential returns per unit of risk. Polygiene AB is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 1,240 in Polygiene AB on October 23, 2024 and sell it today you would earn a total of 115.00 from holding Polygiene AB or generate 9.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AB SKF vs. Polygiene AB
Performance |
| Timeline |
| AB SKF |
| Polygiene AB |
AB SKF and Polygiene Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AB SKF and Polygiene
The main advantage of trading using opposite AB SKF and Polygiene positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AB SKF position performs unexpectedly, Polygiene can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Polygiene will offset losses from the drop in Polygiene's long position.The idea behind AB SKF and Polygiene AB pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Polygiene vs. G5 Entertainment publ | Polygiene vs. Nexam Chemical Holding | Polygiene vs. Swedencare publ AB | Polygiene vs. Genovis AB |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Share Portfolio module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital |